by Stanley Courage Dugah

Created on: June 29, 2010   Last Updated: September 19, 2010

Saving money is a financial habit that's central to financial freedom, but you need to know when and how to save to be successful in your financial life. And you don't need to spend much money on learning the need and benefits of saving money.

Detailed below are seven simple tips on saving money.

1. Start Paying Yourself

Paying yourself is a money saving habit that's very much similar to

running your life like a business. When you treat yourself as a business entity that needs to be paid for work done (at your workplace) or time used in making investments that earn you income beside a regular job/ in the absence of a regular job, you invest a lot in your financial health.

Set a percentage (probably between 2-10%) on your gross income and make it a habit that should be applied to every single paycheck.

2. Don't Throw Your Small Changes Away

We live in a world in which changes are not considered as being important in our financial life, but they are. If little drops of water make mighty oceans, then little dimes make mighty dollars.

You'll be better off saving your changes somewhere, where they can add up into a three-figure amount that you can quickly dump into a savings account.

3. Be Generous, But Not Too Much

Although not proved by Science, it's an undeniable fact that those who enjoy good financial health and security are people who care for the less privileged in their societies or give a regular part of their wealth to charities.

But that doesn't mean that you should donate every single penny or give a more than necessary part of your income to the needy. And that word must be stressed; the needy!

It's popular to give tips after hanging out at a fancy restaurant or hotel, but don't do that always. Find the right people to help. Some waiters and hotel workers earn more than you think.

4. Always Revise Your Savings Plan

Your spending plan should be flexible if you're thinking about financial success in the long run. A promotion at the work place or increase in income should go hand in hand with a revision of your savings plan. Increase the percentage of your income that you save to improve your financial security.

5. Avoid Impulse Items

The more money you spend on impulse items, the less you have to save; hence the need to walk far from them. Impulse items are things that you don't really need, but end up spending money on them when you see them advertised or come across them somewhere.

This needs honesty and self discipline. You must train yourself to avoid spending money on things that you can do without to get more money to save for your financial security.

6. Be Cautious When Using Credit Cards

Credit cards, in one way or the other, induce us into spending more of our income on impulse items and most at times, lead us into debt. This is why you need to be financially cautious when using your credit cards. Don't let them lead you into indebtedness.

7. Don't Let Your Money Lie Idle

Saving money is financially savvy and risk-free, but letting your money lie idle doesn't make much financial sense. Put it into risk-free investments such as governments bonds and treasury bills to make more money for you.

Interests on these investments can also be saved or used on some pressing needs.

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